Combines Nation's Largest Schooling Company
With One of Industry's Fastest Growing
Expected to Add 11 Schools, 5,000 students and $38 million in Revenues
To Edison in Coming School Year
NEW YORK, June 4 /PRNewswire/ -- Edison Schools Inc. (Nasdaq: EDSN), the
nation's leading private manager of public schools, announced today it has
signed a definitive merger agreement to acquire privately held LearnNow, Inc.,
a rapidly growing education management company. Edison will acquire LearnNow
for approximately 1.4 million shares of its class A common stock. In
addition, Edison will lend LearnNow up to $4 million to fund operations and
expansion prior to closing. Closing is subject to customary closing
conditions and is currently expected to occur on July 1, 2001.
Edison Schools currently manages 113 public schools serving over
57,000 students in 21 states with anticipated current year revenues of
approximately $377 million. LearnNow expects to manage 11 schools with a
total enrollment of over 5,000 students this fall in 4 states. LearnNow
estimates its revenue for the coming school year will reach approximately
$38 million, nearly double its current year.
LearnNow has developed a successful school model to serve students in
under-resourced communities. The LearnNow model includes high academic
standards, significant parent, community and civic involvement, and a focus on
teaching students how to learn. It also includes significant investment in
teacher training and support.
"We are excited about the combination of LearnNow and Edison for five key
reasons," said Edison's CEO, Chris Whittle. "First and foremost, LearnNow's
management team will be a great boost to our organization. Talent and a
commitment to great public schools fuel our growth-and LearnNow has a lot of
both. Second, LearnNow has demonstrated great strength in cultivating
community support to establish and build successful schools. Third, we expect
this combination will produce significant operational efficiencies. LearnNow's
largest concentrations of enrollment are in Washington, D.C. and Chester, PA,
cities where Edison has or will soon have significant presence and both
companies are headquartered in New York City. Fourth, LearnNow has potential
expansion capacity of approximately 5,000 students within its existing client
relationships, which could facilitate additional growth in the next couple of
years. Finally, we believe the merger will be immediately accretive to our
earnings, prior to the amortization of goodwill, by an incremental $0.03 per
share in FY02."
Eugene Wade, LearnNow's Chairman and CEO will become an Executive Vice
President of Edison and will lead development teams specializing in major new
urban clusters of schools. James Shelton, LearnNow's President, will serve as
President of the LearnNow division of Edison.
"Joining together with Edison provides LearnNow with the resources
necessary to further our mission of building a network of public schools that
can provide young people from under-resourced communities with a world class
education. We have been enormously impressed with the systems Edison has
built over the past decade, particularly those related to academic
performance," said Wade and Shelton in a joint statement. "This is a very
exciting time in the world of education reform, and as part of the Edison
team, we believe we can help shape and influence the quality and direction of
that reform. We are thrilled to become part of this great company."
Edison will host a conference call with analysts and investors to review
the LearnNow merger later today. The call will occur between 12:00 p.m. and
12:30 p.m. (Eastern time). Interested parties may listen to the call, which
will be broadcast live over the Internet, through the Company's website at
http://www.edisonschools.com. To access the webcast, participants should
visit the Investor Relations section of the website at least fifteen minutes
prior to the start of the conference call to download and install any
necessary audio software.
Started in 1999, LearnNow opened its first seven schools in the fall of
2000: two in St. Paul, MN, four in Washington, DC, and one in Philadelphia,
PA. In addition, LearnNow has a robust pipeline of new business opportunities,
having been selected to manage three schools in Pennsylvania's Chester Upland
School District (with a current enrollment of approximately 2,300 students)
and having the authority through its current arrangements to serve up to
approximately 10,000 students. LearnNow is an education management company
dedicated to helping parents, educators and other community members from
under-resourced communities establish and maintain high performing schools
that focus on literacy, math, science, and technology. In collaboration with
community-based organizations and educators, LearnNow prepares students to
become successful college students and leaders in the 21st Century's
"knowledge economy."
Edison currently manages 113 public schools with a total enrollment of
approximately 57,000 students. Through contracts with local school districts
and public charter school boards, Edison assumes educational and operational
responsibility for individual schools in return for per-pupil funding that is
generally comparable to that spent on other public schools in the area. Over
the course of three years of intensive research, Edison's team of leading
educators and scholars developed an innovative, research-based curriculum and
school design. Edison opened its first four schools in August 1995, and has
grown rapidly in every subsequent year.
Any statements in this press release about future expectations, plans and
prospects for the Company, including statements about the potential financial
impact of the acquisition, the number of schools and students expected to be
served, potential operating efficiencies and other statements containing the
words "believes," "anticipates," "plans," "expects," "will," and similar
expressions, constitute forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from those indicated by such forward-looking statements as a result
of various important factors, including: the acquisition is subject to closing
conditions and there can be no assurance that those conditions will be
satisfied and the acquisition actually completed, we may experience
difficulties in integrating the personnel and operations of the acquisition,
LearnNow may not succeed at executing expected management agreements, and the
actual number of schools and students served by LearnNow and the revenues
generated by LearnNow could be smaller as the result of a variety of factors
similar to those we face in our business, which are discussed in our most
recent quarterly report filed with the SEC. In addition, the forward-looking
statements included in this press release represent the Company's estimates
and views as of June 4, 2001. The Company disclaims any obligation to update
these forward-looking statements in the future. Accordingly, these
forward-looking statements should not be relied upon as representing the
Company's estimates or views as of any date subsequent to June 4.
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SOURCE Edison Schools Inc.
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Related links:
http://www.edisonschools.com
CONTACT:
Adam Feild, 212-419-1623, or Gaynor McCown,
212-419-1733, both of Edison Schools Inc.
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